PETALING JAYA: Hong Leong Bank Bhd’s (HLB) net profit rose marginally by 0.6% to RM687.25 million for the second quarter ended December 31, 2018 compared with RM683.07 million in the previous corresponding period, due to lower net income of RM86.4 million.
However, this was mitigated by write back of allowance for impairment losses on loans, advances and financing of RM68.6 million, lower operating expenses of RM5 million and higher share of profit from associated companies of RM3.3 million.
Its revenue declined 7% to RM1.14 billon from RM1.23 billion.
The bank has proposed to declare an interim dividend of 16 sen per share for the quarter under review.
HLB’s first-half net profit grew 5.5% to RM1.39 billion from RM1.32 billion, with revenue falling 0.7% to RM2.39 billion from RM2.41 billion.
The group told Bursa Malaysia that for the first-half period, it achieved RM2.39 billion in total income, supported mainly by a healthy expansion in loan book.
Net interest income came in lower at RM172 billion with net interest margin standing at 1.98%.
Non-interest income, however, expanded 7.9% to RM675 million, recording a higher non-interest income ratio of 28.2% on the back of stable contributions from fee income, higher foreign exchange gains and gains from the divestment of a joint venture.
HLB’s goss loans, advances and financing rose 4.8% to RM131.6 billion, predominantly driven by expansion in mortgages and domestic business segments as well as overseas operations.
The bank said its asset quality continue to be amongst the strongest in the industry with a gross impaired loan of 0.8%, while loan impairment coverage (LIC) ratio remained solid at 122% post-MFRS9.
Inclusive of regulatory reserve set aside as at December 31, 2018, its LIC ratio stood at 201%.
The bank’s common equity tier 1, tier 1 and total capital ratios were at 12.7%, 13.3% and 16.3% respectively as at end-December 2018.
HLB group managing director and CEO Domenic Fuda (pix) said executing the digital strategy remains the group’skey priority in strengthening digital offerings and transforming its products and services.
“Leveraging on our branch footprint and digital capabilities, we continue to grow our domestic franchise and regional businesses by entrenching ourselves in the communities,” he added.
Meanwhile, Hong Leong Financial Group Bhd (HLFG) reported a 2.8% decrease in net profit to RM481.55 million for the second quarter ended December 31, 2018 against RM495.34 million in the same quarter a year ago, dragged by lower contribution across all the operating divisions.
Revenue also came in 8.8% lower at RM1.25 billion compared with RM1.37 billion previously.
For the first six months of the current financial year, its net profit grew 3.9% to RM987.24 million from RM950.6 million a year ago, while revenue was down 0.6% to RM2.63 billion from RM2.64 billion.
At the noon break, share prices of HLB and HLFG gained 0.1% and 0.7% to RM21.30 and RM19.96, respectively.